The papers have been awash with tales of billion shilling
scams.
Us mere mortals wonder what we would do with a ten percent
cut or sh2.4b of a sh24b deal.
The safe bets are we would buy property or start a business
to continue to earn an income long after the windfall has been spent and with
the balance say, sh100m see the world -- sunny beaches, cocktails at noon and
we may even take up skiing or horse riding.
Oh yes, and we would hand in our resignation letters at our
places of work.
Reality of course would set in when the returns on our
investment cannot maintain us in the lifestyle we have become accustomed to.
That’s when you see the “dealers” starting to sell their assets. And before not
long they are back looking for a job. In the hope of pulling off another major
heist maybe.
Shocking as it sounds this is the fate of most of our white
collar criminals. It shouldn’t come as a surprise.
Think about it.
To have access to sh24b you are a senior official with a
lifestyle to match – never mind that your official salary is only sh4m. So for
ease of calculation let us say you have sh10m a month lifestyle. That would add
up to a sh120m a year budget.
So let us assume you invest all of your sh2.4b where would
you put it to at least get five percent a year?
The easiest thing would be to park it in treasury bills and
bonds where you might be able to manage the five percent without breaking a
sweat and even double digit returns. But because your money may be hard to
explain, you would be forced to avoid official channels. Even the banks are
tricky (but with all the forgeries flying around maybe not!).
So the next best thing would be real estate.
A few years ago at
the height of our own real estate bubble it was rumoured that you could double
your investment in a year buying and selling land. But South Sudan went up in
flames, the donors turned off some taps and that avenue for juicy returns dried
up.
And not to mention the Uganda Revenue Authority (URA) now
wants proof of tax on the income you have used to buy property of sh50m and
above and buying and selling property becomes very dicey.
Let us assume anyway that before this life changing deal you
had bought yourself an acre or two of land, so you need not buy any land now to develop.
So you put up some rental properties and look forward to
collecting rent throughout the year. You will discover very quickly that even
if you pour in the whole sh2.4b in a property, after building, managing and
other costs you will be lucky to get five percent a year, believe it or not.
And if this recently retired paper pusher cannot make money
in real estate what makes you think he will in starting, running and growing a
business? Where incomes fluctuate, one has to market, sale, hire and fire and
generally put in an honest day’s work, day after day, year after year.
It is not easy to make money no matter how our local
businessmen make it seem.
"Collapse maybe delayed but it comes eventually."
Which explains why our corrupt officials keep clinging to
office (don’t believe their “for God and my country” spiel), because they need
to steal more and more to keep these fictitious empires afloat.
It is this kind of
money that fuels bubbles and speculates in Ponzi schemes. These guys are not
stupid. They know like the Swahili say, “A thief has forty days” so they are
always trying to fashion a soft landing.
But the laws of money always come into play.
Even those who have stolen money that is weighed in tonnes get
their comeuppance.
Last week the Kenyan press reported that former Kenyan
President Daniel arap Moi and his close ally Nicholas Biwott were battling a
company to regain property they had entrusted it with in the 1980s. The company
denied any knowledge of an agreement between itself and the former political
kingpins.
As unpalatable an option as it was, Moi and Biwott have now
had to take their case to court knowing full well a lot of uncomfortable
details will come to light.
So yes, the takings from corruption are nice while they last.
But like the gambler, corrupt officials should hope to die in their sleep,
because the reality on the other side can be hard to swallow.
